Opportunities for long-term high-risk real estate investment

For those with a penchant for the exotic, or even the extreme, here are my top three tips for long-term investment high on the risk curve:

1. Urban land and edge city land in growing African cities

Africa is a huge continent with an equally sized potential for economic growth. Real estate opportunities are likely to arise not only in the faster-growing cities such as Kigali, Dar Es Salaam and Addis Ababa, but also in the most stable countries with the higher integrity rankings, such as Botswana, Mauritius and Namibia.

Those countries experiencing a peace premium and growing prosperity will be favoured by investors. The best opportunities may be unconventional investments, such as purchasing land for expansion or redevelopment as well as small retails, workshops and logistics, which could play out better than big-box, plate glass offices, for example.

2. Residential property in Dubai

Dubai is well-placed in the longer term to service not only wealthy Middle Eastern investors, but also its own growing middle class. Low and falling oil revenues threaten wealth creation in many parts of the Middle East at present, but the UAE started to diversify its economy many years ago, making it better positioned to ride this storm.

The hybrid nature of the city as a business and tourist destination means it has the potential to attract both residents and leisure or lifestyle second home owners – provided these aren’t severely impaired by the geo-political instability of the region.

3. Resort and leisure developments in inaccessible locations

The potential growth in demand for leisure properties in Asia is a major force that can’t be ignored. Local and regional tourists are already a growing market in Thailand and Vietnam and we anticipate that it is poised for massive expansion. The development of Hainan island illustrates potential for Chinese tourism in the South China Sea and beyond.

Some of this tourism may look quite different to western favourites, focusing less on sun, sea and sand and more on social activities in urbanised centres, but it is still evolving and participants will need to keep abreast of fast-developing trends.